The Daily Breakdown: Negative GDP?!

The Every day Breakdown seems to be on the newest GDP print, which confirmed an financial contraction for the primary time since early 2022.

Thursday’s TLDR

META & MSFT ship
GDP turns adverse
BTC hits multi-month excessive

What’s Occurring?

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Yesterday’s huge speaking level was the adverse Q1 GDP print. Nonetheless, that dialogue appears to be taking a again seat to the massive earnings responses from Meta and Microsoft. 

Whew!

Bulls wanted mega-cap tech to report robust outcomes. Tech has a 30% weighting within the S&P 500 and has been the second-worst performing sector thus far this yr — about doubling the decline that SPY ETF has seen. Not solely are these a few of buyers’ favourite shares, however they’ve large weightings too. 

That is nice to see, however it doesn’t ease among the worries round that adverse GDP print, so let’s break that down. 

Imports surged within the newest quarter, (which subtracts from US GDP). Imports jumped as companies positioned themselves forward of tariffs, making an attempt to keep away from pointless value will increase. Additional, after 10 straight quarters of constructive contribution to GDP, authorities spending dipped. Given the Administration’s method to the federal authorities through DOGE, this contraction isn’t too shocking. 

However exterior of the noisy import/export knowledge, enterprise and shopper spending was respectable. We’ve heard on company convention calls that shopper spending has been somewhat lumpy, however regular all through 2025. 

That is the massive one to know: Private consumption is greater than two-thirds of the GDP report. It confirmed annualized progress in Q1, however posted its lowest determine in virtually two years. Shoppers proceed to spend, which is sweet, however falling confidence appears to be holding them again. 

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The Setup — Meta

Final night time, Meta beat on earnings and income expectations and spoke optimistically sufficient on its convention name to get buyers excited. In response, shares are greater by about 5% to six% in pre-market buying and selling. 

Yesterday we checked out some key ranges for Microsoft. With it above its 200-day in pre-market buying and selling, it’d be nice to see it clear this measure and keep above it in at present’s common session. 

Can Meta do the identical factor? 

After I have a look at Meta, I see a inventory that discovered help close to $480, then cleared downtrend resistance (the blue line) forward of earnings. 

You may discover the worth vary I added to the proper facet of the chart, displaying what a 6% rally seems to be like from yesterday’s shut. That places it proper close to $580, $100 a share off the current lows, and proper into the 50-day and 200-day shifting averages. 

Be happy so as to add a few of these measures to your individual Meta charts, too. 

From right here, bulls will need to see META inventory cost by way of these measures and begin to use them as help. Bears will hope that these measures are resistance. If Meta does break by way of them although, a bigger rebound might ensue. 

Choices

For some buyers, choices may very well be one various to take a position on Meta. Bear in mind, the danger for choices patrons is tied to the premium paid for the choice — and dropping the premium is the total danger. 

Bulls can make the most of calls or name spreads to take a position on additional upside, whereas bears can use places or put spreads to take a position on the good points truly fizzling out and Meta rolling over. 

For these seeking to be taught extra about choices, contemplate visiting the eToro Academy.

What Wall Road is Watching

MSFT – Microsoft shares are greater by about 9% in pre-market buying and selling. The corporate cruised previous analysts’ earnings and income expectations, and delivered robust cloud outcomes with its Azure unit. What’s extra, administration spoke favorably about bettering working margins for the yr.  

BTC – Bitcoin has been holding up effectively over the previous few weeks and continues to inch greater. It’s now at its highest stage since February twenty fourth, formally hitting a multi-month excessive. It’s obtained some questioning if $100K is subsequent and whether or not it may elevate different cryptocurrencies, like ETH. Try the chart for BTC. 

Disclaimer:

Please word that resulting from market volatility, among the costs might have already been reached and eventualities performed out.